Passport to Denim: A Snapshot of the Global Denim Market

Though a tried-and-true American favorite, the westernization of the world in fashion has made denimlust a global phenomenon. And with more players developing new ways to reach new consumers faster, denim manufacturing has become just as diverse as those who wear it.

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The industry—valued at more than $57 billion, according to P&S Market Research, which also says the sector will experience an annual growth rate upward of 6 percent through 2023—has gotten more innovative and advanced as both makers and buyers look for denim that does more while leaving a lesser impact on the environment. The move away from simply chasing cheap in favor of putting more into the product has also served to shift the market share map for denim manufacturers.

From China to Italy, and from sustainability to supply chain innovations, here’s a look at what some of the top denim producing countries are doing for the market.

Bangladesh

Bit by bit, Bangladesh is establishing itself as a real leader in denim.

The Southeast Asian nation known largely for its low-cost manufacturing, contributed the third most denim imports to the U.S. last year. In 2017, Bangladesh shipped $508 million worth of denim apparel to the U.S., a nearly 10 percent jump from where it stood the year prior.

That’s been thanks in part to two things: highly competitive costs and innovation.

While European mills had been known for being at the forefront of R&D, Shams Mahmud, managing director of Bangladesh’s Shasha Denims Limited, said that has been less the case of late.

“Because of the rise of energy costs and also wages, they have cut down on R&D, and this is where a country like Bangladesh comes in,” Mahmud said. “Human resources are not that expensive in Bangladesh and then the cost of electricity, water is not that much, so that gives us the scope to fill this vacuum and come up on our own.”

The focus for Bangladesh has been sustainability. Though lower cost than other countries, Bangladesh doesn’t seem to skimp on machinery, employing the latest iterations of high-tech equipment to improve products and processes. More and more, circularity is coming into the conversation, too. So far, Shasha has produced nearly 1.5 million yards of denim made from post-consumer waste.

Going forward, Mahmud said more mills in Bangladesh will be looking to go green with their blue, using more eco-friendly materials, like organic and BCI cotton, looking into cleaner dyeing technologies, and turning to technical denim that does more while using less.

“That’s something that we’re offering buyers right now, and for that reason a lot of the big brands are shifting their denim base from the European denim mills to the Asian denim mills just to get more of the R&D,” Mahmud said.

China

China has long been the leading manufacturer of denim in terms of volume, and when it comes to getting denim apparel to the United States, the Asian powerhouse is still the largest supplier—though its share continues to slide as Mexico closes the gap between its own second place spot and China’s lead.

Last year, China shipped $922 million worth of denim apparel to the U.S., nearly 2 percent less than what it shipped in 2016, but the country still accounts for more than 25 percent of overall U.S. denim imports.

“Chinese denim fabric mills are still very strong, especially for new innovation developments,” said Ruyi Zhong, vice president of Foshan Season Textile and Garment Co. based in Guangdong. And much of the country’s innovation and development in denim has been centered around fabric with a friendlier environmental footprint.

China may not have been known for eco consciousness in years past, but the country has been cracking down on polluters in a big way, with non-compliant factories facing government-ordered closure.

“Eco fabric has become a big trend,” Zhong said. “From our company, we develop ‘Ecology Denim’ collection, which is including pre- and post-consumer recycled cotton/poly, but we are the only one in the market using the post-consumer yarn for warp.”

“The Chinese government will continue to execute the strict environment protection, therefore, only those good mills who have strong R&D, a high-quality control system and the ability to control costs will be able to survive. And those not able to meet the environment protection standard will be closed down,” Zhong said. “I believe China’s denim industry—or even the whole industry—will transform to a better and more high-end level.”

Mexico

Though relations have grown tense over the course of the North American Free Trade Agreement (NAFTA) renegotiations, Mexico is second only to China when it comes to supplying the U.S. with its jeans.

The country contributed $793 million worth of denim apparel to the U.S. last year. And though its share slid more than 8 percent over 2016, Mexico still makes up nearly 22 percent of overall U.S. denim imports.

Mexico is known for high-quality fabrics and the convenience of speed to market when shipping to the U.S., which has been key for fast fashion brands looking for quicker turn denim.

That fact has been part of solidifying Mexico’s position supplying a heavily-denim donning United States. Roughly 40 percent of men’s and boy’s jeans in the U.S. come from Mexico, where leaders like Levi Strauss & Co., VF Corp., Lee and Wrangler have supply chains set up. According to a report released by the United States Department of Agriculture last year, Mexico is the seventh largest exporter of denim worldwide, and it’s held that spot for 15 years.

The latest developments coming out of Mexico for denim, according to Kaltex America design director Alvyda Kupinas, are largely aligned with the global market trend toward greater sustainability.

Manufacturers in Mexico, according to Kupinas, are using eco-friendly blends like Tencel Modal and Repreve recycled polyester with moisture management properties. There has also been continued importance placed on developing performance stretch denim with CoolMax, ToughMax, DualFx and bi-stretch denim with 360-degree comfort. When it comes to finishing, the focus has been on foam coating, ozone finishing, overdyeing, digital printing, and waterless and low energy laundry applications.

Price may not be Mexico’s strongest selling point, but what it does offer often makes up for that.

“In general product from Mexico is priced higher than the Asian competitors, but when you consider the inventory carrying costs, delivery costs and lost opportunity retail sales due to lead time response time, the total cost becomes more attractive and competitive in the market,” Kupinas said.

Italy

Turning to Italy, it’s true denim seekers have always looked to the country for high quality, and that hasn’t changed. What they’re getting with that quality now more than in the past, is performance and sustainability.

“Clean denim” in terms of both look and content has been among the latest developments coming out of Italy for denim, according to Alberto Candiani, a denim expert who runs leading Italian mill Candiani Denim, his family business.

“Performance is a given factor to all stretch denim nowadays, so the focus is more on sustainable fibers, eco dyes and finishing,” Candiani said. “Taste, creativity, innovation, a finer aesthetic and hand feel have always been part of what sets the Italian denim industry apart from others.”

Sustainability has been a built-in factor for sourcing in Italy, which is known for having strict environmental legislation, and ethics and quality have been top of mind, too. But those qualities—now more sought after as the sector turns toward greater transparency—don’t come without cost.

Speaking candidly, Candiani said, “This is certainly the downside of making a ‘popular’ item like denim in Italy. Costs are obviously higher here. Salaries, energy, water, everything. Innovation has its own costs too and the government does not support research at all. Making denim in Italy is 25 percent more expensive than what it is in Turkey (which represents our strongest competition), probably 50 percent more than India, Pakistan and most of the Far East countries.”

Cost has contributed at least in part to fewer Italian denim imports coming into the U.S., where an overwhelming majority of mass market retailers can’t pay the prices for Made in Italy denim and ever expect to meet their already thin margins.

Italy just inched into the top 20 list of those supplying denim to the U.S., supplying $18 million worth of denim apparel in 2017, a nearly 10 percent dip from what it shipped the previous year. The country accounts for just half a percent of overall U.S. denim imports.

Pakistan

Skirting the general ills in the apparel industry, Pakistan’s denim sector has hit on a pretty positive period. The country is the fourth largest supplier of denim to the United States, and in 2017 the country shipped roughly $214 worth of denim apparel to the U.S., a nearly 20 percent jump over what it shipped in 2016.

Needless to say, the denim industry in Pakistan is thriving—even at a time with other mills around the world are struggling.

“Around the globe, many traditional centers of textiles and apparel production are seeing their mills and factories cutting back,” said Henry Wong, director of product development and marketing, North America at Pakistan’s Artistic Fabric & Garment Industries (AFGI). “Suppliers in Pakistan are continually investing in innovation and sustainability. In this thriving, dynamic environment, we see Pakistan’s industry leaders constantly asking themselves, ‘how can we make better products?’ Then they go ahead and do it.”

For AFGI, one of those ways it’s making better products is by turning to old materials to make new ones, rather than depleting more of the world’s resources sticking solely to virgin inputs.
The company recently added a post-consumer waste tearing plant to its facilities, allowing it to transform old jeans into new fabrics entirely in house, which has served to reduce what would have otherwise ended up in landfill.

“There is an inspiring readiness to try new things, even—or especially—when they seem outside of normal conventions,” Wong said. “For designers and product developers, this is an ideal place to turn ideas into realities. Imagine a sandbox in which you can play with all the latest toys, from the most recent state-of-the-art laser machines to the newest dyeing and finishing technologies.”

More than that, at a time when trade protectionism is ramping up in one part of the world, companies are looking to trade beneficial trade opportunities and adjusting their sourcing strategies to suit. For one, Pakistan has duty free access to the European Union under the Generalized Scheme of Preferences Plus (GSP+) program, which has proven beneficial for the country.

“More and more, European retailers are sourcing from Pakistan to take full advantage of the speed, flexibility, and quality many producers here offer,” Wong said.